Treasury Secretary Janet Yellen informed Congress on Friday that the nation’s statutory debt ceiling would be reached on January 19th, necessitating ‘exceptional measures’ that can only be implemented for a limited time due to an impending political conflict this summer.
In a letter to congressional leaders, Yellen stated, “Once the limit is reached, Treasury will need to take extraordinary measures to prevent the United States from defaulting on its obligations.”
Treasury is now unable to forecast how long extraordinary measures will allow us to continue paying the government’s commitments, but it is doubtful that cash and extraordinary measures will run out before early June, she wrote.
Her statement comes just days after House Republican insurgents compelled House Speaker Kevin McCarthy to go toe-to-toe with the administration over the debt limit, which some financial experts say might lead to a full-scale economic disaster.
The United States will reach its debt ceiling on January 19, Treasury Secretary Janet Yellen informed Congress. Treasury will need to take extraordinary measures to prevent the United States from defaulting on its obligations once the limit is reached, she said.
McCarthy made the pledge during his arduous but ultimately successful campaign for Speaker, pledging not to raise the debt ceiling without accompanying expenditure cuts that the White House and Senate are certain to oppose.
‘Would he rather shut down the government than raise the debt ceiling? During the McCarthy standoff, conservative Rep. Ralph Norman (R-S.C.) stated that this issue was non-negotiable.
As it turns out, Yellen will be abroad when the United States technically reaches its debt ceiling; details of her trip were published on Friday.
She stated that the extraordinary measures are only effective for a “limited time” and that presidents and Treasury secretaries have stated that the United States “must not default” on its obligations.
Before handing over control of the House to Republicans, some Democrats wanted President Biden and Democrats to unilaterally pass a debt limit raise.
Legislators claim Speaker Kevin McCarthy pledged not to bring forward a debt limit rise without expenditure cuts.
‘Would he rather shut down the government than raise the debt ceiling? During the McCarthy standoff, conservative Rep. Ralph Norman (R-S.C.) stated that this issue was non-negotiable. Last Monday, Representative Chip Roy (R-Texas) refused to disclose the details of the agreement that McCarthy negotiated with him and other holdouts. Because I’m still having chats here for a few hours, I’ll refrain from providing specifics. It is safe to state, however, that we believe there are explicit, tangible spending constraints tied to the debt ceiling hike’ – verifying the connection.
If he were to bring a clean debt ceiling raise bill to the floor over the weekend, Roy would not rule out calling for McCarthy’s removal — another tool obtained by the rebels — if he were to call for McCarthy’s resignation.
Roy stated on CNN’s ‘State of the Union’: ‘I’m not going to speculate on how we’ll use the mechanisms of the House to ensure we enforce the terms of the deal.’
He stated, “However, we will use the tools of the House to enforce the terms of the agreement.”